Pakistani rupee (PKR) recovered after 29 days of consecutive losses and posted gains against the dollar today.
It rose as high as 264 against the greenback after the IMF mission arrived in Pakistan to begin technical-level talks on the country’s 9th review this week. The rupee appreciated by 0.64 percent and closed at 267.89 after gaining Rs. 1.74 against the greenback. Despite today’s gains, it quoted an intraday low of 270 before flipping trends for growth.
Today’s welcoming gains come after three days of consecutive intraday drops where the PKR shed Rs. 7 or more against the US Dollar, as markets sought clarity before the lender’s delegation arrived yesterday (Monday).
The local unit was bullish against the greenback and opened trade at 266.875 in the open market. By midday, the greenback moved higher against the rupee to as high as 264. After 1 PM, the local unit slowed gains and stayed on the 265 level against the top foreign currency before the interbank close.
The rupee reported gains against the US Dollar today after talks between Pakistan and the IMF resumed today. Dar and co have informed the lender of its intention to implement all demands in order to stay on its program and complete it. The Pakistan side has clarified that all difficult decisions will be taken gradually, while sustainable institutional reforms will be exercised without delay.
Markets were also bullish after money changers observed scores of exporters approaching counters to trade in their greenback profits, which pushed the PKR towards gains after almost a month in crimson.
Today’s gains come following a horrid few weeks of constant decline after which the authorities reluctantly allowed market forces to dictate exchange rate movement. During the previous three interbank trading sessions (Thursday-Monday), the rupee fell by Rs. 38.74, or 14.37 percent. Following the sharp plunge, the rupee became the region’s worst-performing currency this year, tumbling by 16 percent.
According to Fitch Solutions, the PKR could still weaken even further against the US Dollar but its fall will help the country secure further IMF disbursements. But a continued weakening of the rupee will have broader economic implications too. In the near future, it could exacerbate imported inflationary pressure, and may eventually result in steeper policy rate hikes from the SBP. These factors would only worsen Pakistan’s challenging economic outlook.
The PKR was bullish against all of the other major currencies in the interbank market today. It gained 44 paisas against the Saudi Riyal (SAR), 47 paisas against the UAE Dirham (AED), Rs. 2.18 against the Euro (EUR), Rs. 2.45 against the Canadian Dollar (CAD), and Rs. 2.64 against the Australian Dollar (AUD).
Moreover, it gained Rs. 2.97 against the Pound Sterling (GBP) in today’s interbank currency market.
